01778cam a22002537 4500001000700000003000500007005001700012008004100029100002200070245006500092260006600157490004200223500002000265520073900285530006101024538007201085538003601157690005601193690008101249710004201330830007701372856003801449856003701487w10771NBER20150331171831.0150331s2004 mau||||fs|||| 000 0 eng d1 aJovanovic, Boyan.14aThe Pre-Producersh[electronic resource] /cBoyan Jovanovic. aCambridge, Mass.bNational Bureau of Economic Researchc2004.1 aNBER working paper seriesvno. w10771 aSeptember 2004.3 aUntil its sales of a product materialize, a firm is a "pre-producer" in the market for that product. That firm may may be a new start-up, or it may already sell other products. Firms that do not succeed in generating sales eventually become discouraged and move on to other activities. When this fate befalls a lot of firms, as it recently did in several IT-related businesses, the industry experiences a "shakeout." In the model that I will present, during the shakeout some firms switch to flatter, safer earnings. This switch raises earnings at the time of the shakeout but lowers them in the long run, and it therefore raises earnings-price ratios. This has happened on the Nasdaq since March, 2000 when the Nasdaq shakeout began. aHardcopy version available to institutional subscribers. aSystem requirements: Adobe [Acrobat] Reader required for PDF files. aMode of access: World Wide Web. 7aL0 - General2Journal of Economic Literature class. 7aG3 - Corporate Finance and Governance2Journal of Economic Literature class.2 aNational Bureau of Economic Research. 0aWorking Paper Series (National Bureau of Economic Research)vno. w10771.4 uhttp://www.nber.org/papers/w1077141uhttp://dx.doi.org/10.3386/w10771